The country’s largest lender SBI has aims to grow 10-12 percent in the current financial year, with green shoots of revival in credit demand and better recoveries of loans.
In the latter part of 2018-19, State Bank of India (SBI) showed early signs of the turnaround that the bank had diligently and systematically been working for, and multi-pronged strategies needed the desired results.
Moving forward, the bank is looking at strong business growth, capital and liquidity, and the ability to charge spreads to be in leadership positions, SBI said in its annual report 2018-19.
Using experience from the last year, the bank wants to achieve a healthy credit growth of 10-12 percent in 2019-20. To an extent, the credit revival and recoveries in FY19 have already set the tone and the bank is confident of achieving the target set for FY20, SBI Chairman said in his message to shareholders.
After a significantly low credit growth in the previous couple of years, the banking industry saw a pick-up in credit growth during 2018-19 due to strong revival in credit to the corporate sector driven largely by government investment and continued demand from personal loan segment, he added.
In the financial year ended March 2019, SBI reported a standalone profit of Rs 862 crore and a consolidated profit of Rs 2,300 crore.
Also, it registered recoveries of 57 per cent in written-off accounts during the fiscal.
SBI said it wishes to continue with better recoveries in the current financial year.
On the asset front, the lender used a strict monitoring mechanism, helping it bring down gross non-performing assets (NPA) ratio to 7.53 per cent in 2018-19 from 10.91 per cent in the previous fiscal.
The net NPAs or bad loans also declined by 272 basis points to 3.01 per cent.
Besides, the bad loans in the corporate segment dropped from 21.92 per cent in 2017-18 to 13.62 per cent in 2018-19.
Despite the ups and downs, the average recovery rate in stressed accounts under the NCLT route was in excess of 60 per cent, said the annual report.
